Taxpayers shouldn't expect to recover much money from bankrupt solar panel manufactuer Solyndra, which received a $535 million loan guarantee from the Obama administration, Energy Secretary Steven Chu testified on Thursday.
Toward the end of 2010, Chu authorized a restructuring of the original loan agreement that put private investors ahead of taxpayers to collect money in the event of a bankruptcy. In testimony before the House Energy and Commerce committee's oversight panel, Chu said the decision was made to avert immediate bankruptcy and to give the company a "fighting chance for success."
But the company went bankrupt anyway. Asked how much money taxpayers could hope to recover given the restructuring agreement, Chu said it "remains to be seen" but acknowledged it would be "not very much."
Chu also insisted that the Solyndra loan was made "absolutely" on the merits and had nothing to do with rewarding President Obama's campaign donors, who he said he had no contact with.
The chairman of the oversight panel, Rep. Cliff Stearns, R-Fla., asked Chu about an August 2009 email in which a Department of Energy official warned, weeks before the loan guarantee was finalized that, "(T)he model runs out of cash in September 2011 even in the best case…"
Chu said that email referred to the cash flow of a specific project, rather than the company as a whole going bankrupt.
